Creating a transnational hotel program can be a daunting task, characterized by regional nuances, cultural challenges, technical restrictions and local fiefdoms. Travel managers, agency executives and other experts speaking here this week at the National Business Travel Association conference offered a range of pointers meant to ease the complex process, which, in the best circumstances can take six months.
The first key point is to start early, recognizing the possibility of unforeseen pitfalls in pulling together a worldwide program. From there, a jumping off point should be consolidating travel data, a task complicated by en route itinerary changes and incomplete or inaccurate information from direct bookings not handled in preferred channels. "In our case, we know that only 50 percent of our bookings go through the agency," said Keith Mullineux, EMEA travel manager for General Electric. "We suggest you also look at the back-end data--from the credit card, the suppliers and the expense reports. You always have to be careful to avoid double counting."
The panel suggested that multinational companies early in the process also should determine whether to outsource the program. If not, they should assess the required internal resources, based on the number of participating countries, properties and room nights.
Describing his company's program as mid-size, global travel manager Mark Zeigler said Agilent Technologies now has 484 participating properties of 700 solicited last year. "We actually have done both," he said of the insource/outsource question. "We used Direct Connect a few years ago and they did a good job. However, we had a lot of issues getting buy-in because an outsource company had done this work. Fifty-four percent of my travel is [sold outside] the U.S."
Now, Agilent uses an internal sourcing tool and "gets more input from local people," Zeigler explained. That leads to greater overall control and facilitates a single database of all program hotels.
Other items for global travel and procurement professionals to consider at the beginning of the process include how to communicate with travel planners and travelers, how the program would be audited and how mid-year tweaks to the portfolio of preferred properties would be handled.
From the onset, multinationals should clearly define responsibilities for both local and global managers. "I allow my local sourcing people, whether country or regional, to go in and sometimes negotiate with a hotel directly," Zeigler said. "They get the buy-in locally and make sure the deal is reported through our sourcing tool, no matter what."
Aside from price, various factors weigh on the property selection process, including the availability--or lack thereof--of certain hotels within global distribution systems. Many hotels in China, Europe, India and Japan, for example, do not offer such connectivity.
"In Florence, which is very important to GE, we could not manage without a large number of independent properties," Mullineux explained, noting that those properties may not participate in requests for proposals or online auctions, and oftentimes work against corporate compliance by discounting direct bookings. Even if they list in the GDSs, they do not always load rates in a timely fashion. "If you are going to work with these people, you have to be pretty flexible in certain cities."
In the current environment, safety and security warrant much attention. The panel cautioned travel managers about properties located in central business districts, along highways and near government installations. Other red flags are hotels with parking beneath the building or without well-controlled main entrances.
When it comes to negotiating rates, buyers should be aware of stronger and weaker markets around the world, and how they fit together in a cohesive program. "Identify the hot spots," Mullineux suggested. "We know rates are going up where there is a shortage of capacity in places like Moscow, India and China. But I balance that against places where there is overcapacity, like some of the Eastern European capitals."
Mullineux said he strives for simplicity in piecing together a global program with roughly 2,000 properties. "If a property is getting GE volume--a minimum of 200 bed nights per year--that is a pretty good indicator that they are doing something right, in terms of rates, locations, standards, etc.," he explained. "A property that has been getting the volume, that we never hear about in terms of complaints and that is not looking to hike rates stands a good chance at being in our 2007 program."
"In my experience, working at the individual property level can be more effective if you have a high concentration of business in that area," added Jack Lever, vice president of supplier management at Wachovia Corp. "But working on the chain level allows you to work more broadly and bring in national account managers to help you get what you need, whether a rate or an amenity."
Companies also must determine how the program will be implemented and who actually will be making reservations, paying close attention to regional subtleties. In Asia, for example, secretaries oftentimes are responsible. "They are wined and dined by local hotels and even rewarded with loyalty points," said Shangri-La director of sales for western and central U.S. Eldridge Mayor-Perry. "This is a reality in some destinations."
Agilent's Zeigler echoed those concerns in describing "the dangers" of local support. "In certain countries we found we had local hotels on 'preferred' lists that were not part of the global program," he said. "People may have their own little agendas."